Atria: Largely in line with consensus ahead of Q4 – guidance and price levels in focus - Nordea

Ahead of Atria’s Q4, due on 22 February, we maintain our estimates intact. We model -2% y/y sales growth in Q4, driven by Sweden and Finland. We expect virtually flat y/y adjusted EBIT at EUR 16.4m, taking 2023E adjusted EBIT to EUR 56.6m after EUR 49m in 2022. For Q4E, we are in line with LSEG Data & Analytics on adjusted EBIT with 2% lower sales. We expect flat EUR 0.70 dividend proposal for 2023E, slightly below consensus at EUR 0.71. We believe the focus in Q4 will be in the guidance for 2024 and any indications related to sales price development. We have anticipated flattish sales growth for 2024E with 20bp improvement in adjusted EBIT margin, driven by a turnaround in Sweden after investments and profit-improvement programme. In Finland, we have anticipated additional costs related to ramp-up of the new poultry unit. However, we note the company has been running ahead of the initial plan with the ramp-up and hence there could be some upside to our Finland estimates, depending of the ramp-up schedule and costs. Given easing inflation, we believe there is a growing pressure on price levels from grocery chains. On cost side, meat raw material prices have remained at an elevated level, although below peak prices seen during spring/summer of 2023. We view volume outlook for 2024 as stable. Atria should be well positioned going forward with the current investment phase nearing its end with no material refinancing needs in 2024-25. We have a fair value range of EUR 13.1-16.0 per Atria share.